"It’s all right to let Wall Street bet each other millions of dollars every day but why make these bets affect the fellow who is plowing a field out in Claremore, Oklahoma?"

My all time favorite Cherokee, Will Rogers, wrote that in 1924. Today, most of the fellows plowing fields in Claremore, Oklahoma, are still Cherokee -- but a lot fewer of them own the land they are plowing.

Nine years after Will Rogers made that complaint, the New Deal was beginning to roll, and Congress passed the Glass-Steagall Act in response. Glass (D-VA) and Steagall (D-AL) created the Federal Deposit Insurance Corporation. In the Great Depression, when a bank went belly up your money was just gone. Even now, it’s not widely known that the FDIC does not cost the taxpayers a penny. Fees assessed on the commercial banks fund it.

Just as important, the Glass-Steagall Act created a firewall between commercial banks and investment banks. Investment banks were not insured by the FDIC, did not have to pay the assessments, and were free to gamble with the money of anybody dumb enough to entrust it to them for the purpose.

Commercial banks are the places you go to get your crop loan, your car loan, or your mortgage. They had strict capital reserve requirements, which placed a limit on the amount of “leverage” they could bring to bear -- that is, the multiple of customer deposits they could invest.

Bankers always thought this limit cramped their style, and I suppose it did. They were free to gamble with their own money, but they were limited in how much they could gamble with the money deposited by that fellow plowing his field in Claremore, OK.

This terrible injustice to the banksters, I mean bankers, was corrected by Gramm (R-TX), Leach (R-IA), and Bliley (R-VA) in 1999. Their bill, tearing down the wall between investment and commercial banking, was signed into law by President Clinton, who should have known better, but the political zeitgeist of the times was still deregulation. “Government,” in the famous words of President Reagan, “is the problem.”

Phil Gramm was John McCain’s principal economic advisor until he got canned for referring to Americans as “a nation of whiners.” The “whiners” did not know it at the time, but the gamblers unleashed by Gramm’s deregulation had leveraged their assets 30:1 and had, by spinning out derivative instruments of mind-bending complexity, become “too big to fail.”

That is, if they went broke they would take down so many businesses and people with them that the farmer in Claremore would get knocked right off his tractor. Of course, some people doubted any investment bank was “too big to fail,” and so the folks in charge let Lehman Brothers go down in 2008, apparently to see how bad it could get.

The Dow Jones average took the greatest one-day dive in history and racked up a trading range of 1,000 points. Lehman’s failure set off a cascade of smaller failures that played out for months. If you once had a retirement account but you don’t anymore, you can thank that experiment.

I remember back when I was young enough to be shocked, an undergraduate at the University of Texas. A law professor who was on President Nixon’s defense team in the Watergate scandal was asked whether some new cover-up revelation was “serious.” “Serious?” the professor asked, “the Dow Jones dropped 50 points on the news!” Fifty points. Serious. How times do change.

So we had to bail out the banksters from the consequences of their own recklessness or kiss our retirement plans goodbye. No problem, right? Wasn’t the major issue of the 2000 elections what to do with the budget surplus?

It was the issue, indeed. Bush said, “it’s your money and you know better than the government how to spend it.” Al Gore said this is our chance to “put Social Security in a lock box” and end the bipartisan accounting tricks with the trust fund.

Oh, now I remember. Bush won, and cut our taxes.

“When a party can’t think of anything else they always fall back on Lower Taxes. It has a magic sound to a voter, just like Fairyland...” Will Rogers wrote that in 1924, not 2000, and in the same year he expressed the only thing that will get us out of this even if we do, as Occupy Wall Street demands, quit allowing unlimited gambling with other people’s money:

“People want JUST taxes, more than they want lower taxes. They want to know that every man is paying his proportionate share according to his wealth.”

Maybe I’m biased by my Cherokee genes, but any man who could write that in 1924 deserves our attention today. There was about to be an event called the Great Depression.

[Steve Russell, Cherokee Nation of Oklahoma, lives in Sun City, Texas, near Austin. He is a Texas trial court judge by assignment and associate professor emeritus of criminal justice at Indiana University-Bloomington. Steve was an activist in Austin in the Sixties and Seventies, and wrote for Austin’s underground paper, The Rag. Steve is also a columnist for Indian Country Today, where a version of this article also appeared.]